Madras High Court
M/S. Scotts Garments Ltd vs The Commercial Tax Officer on 9 March, 2020
Author: R.Mahadevan
Bench: R.Mahadevan
W.P.Nos.13954 to 13956 of 2012
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 09.03.2020
CORAM:
THE HON'BLE Mr. JUSTICE R.MAHADEVAN
Writ Petition Nos.13954 to 13956 of 2012
& M.P.Nos.1, 1 and 1 of 2012
M/s. Scotts Garments Ltd.
Represented by its Director, Naseer Ahmed,
No.226/1 Pudurpirivu, Tirupur ... Petitioner in all W.Ps.
..vs..
The Commercial Tax Officer,
Bazaar Circle, Tirupur ... Respondent in all W.Ps.
Common Prayer:- Writ Petitions filed Article 226 of the Constitution of
India praying for the issuance of the Writ of Certiorarified Mandamus
Calling for the records on the files of the respondent in TIN. No.
33662424001/07-08; 2008-09 and 2009-10(all) dated 22.03.2012 and
27.4.2012, quash the same as being contrary to the principle of natural
justice and that of the principle laid down by this Court in the decision
reported in (2006) 146 STC 642 (Madras Granites (P) Ltd. Vs.
Commercial Tax Officer Arisipalayam Circle Salem and another)
without jurisdiction and authority of law and further direct the
respondent to pass order afresh after grant of notice and opportunity to
the petitioner.
http://www.judis.nic.in
W.P.Nos.13954 to 13956 of 2012
For Petitioner (in all W.Ps.) : Mr. R.Senniappan
For Respondents (in all W.Ps.) : Mr. A.N.R.Prathap,
Govt. Advocate (Taxes).
---
COMMON ORDER
The petitioner, who is an assessee in the books of respondent's assessment circle, is the exporter of Hosiery garments. According to them, they are entitled for refund of tax paid on the purchase of raw materials and accordingly claimed the same. The Enforcement Wing Officials found it otherwise on the basis of the verification of records. Hence the refund so granted was sought to be recovered vide orders, dated 22.03.2012, for the years 2007-08, 2008-09 and 2009-10. Against these recovery orders, the present writ petitions have been filed.
2. Heard both sides.
3. The learned counsel appearing for both sides submitted that the issue involved in these cases is covered by a decision of this Court in the case of M/s. Interfit Techno Products Ltd. Rep. By its Managing Director v. The Principal Secretary / Commissioner of Commercial http://www.judis.nic.in W.P.Nos.13954 to 13956 of 2012 Taxes, Ezhilagam, Chepauk, Chennai – 5 and another reported in 2014 SCC OnLine Mad. 8459 (W.P.No.13901 of 2013), wherein, while rejecting the contention of the petitioner that there is no machinery under the TNVAT Act to reserve the refund granted pursuant to an order passed on an application filed by the dealer in Form W under Rule 11 (2) of the TNVAT Rules and in paragraph 63 (3) to (5) it has been held as follows:-
“63... (3) For the reasons assigned, it is not sufficient for a dealer claiming refund under Section 18(2) of the Act to show that he has paid input tax on the goods purchased; that those goods are used in the manufacture and nothing more but there is duty upon the dealer to satisfy the Assessing Authority that the claim is not hit by any of the restrictions or conditions contained under Section 19 of the VAT Act. In this regard, it is essential for the Assessing Authority to embark upon the fact finding exercise to ascertain the quantum of loss of the goods which were purchased on which tax was paid vis-a-vis the goods manufactured from and out of the goods purchased and to examine as to whether they fall within any of the restrictions contained in Section 19 of the VAT Act. The Assessing Officer has to conduct an exercise by which it is to be ascertained as to whether the http://www.judis.nic.in W.P.Nos.13954 to 13956 of 2012 representation made by the dealer is justified and is not hit by any any of the restrictions and conditions contained in Section 19 and in particular Section 19(9) of the VAT Act.
(4) It is held that the Assessing Authorities are not justified in adopting uniform percentage as invisible loss and calling upon the dealer to reverse the input tax credit availed to that extent. Consequently, all notices issued to the petitioner for reopening and all consequential order passed reversing the input tax credit to the extent of either 4% or 5% or on adhoc per centage stands set aside.
However, liberty is granted to the concerned Assessing Officer to issue appropriate show cause notices to the petitioners clearly setting out under what circumstances they propose to revise or call upon the petitioner to reverse refund sanctioned and after inviting objections proceed in accordance with law. (5) The undertaking given by the dealer in Form W is with regard to information furnished for the purpose of verification by the Assessing Officer under Rule 11(2) of the VAT Rules for being entitled to refund under Section 18(2). Therefore, it is not as if the Act does not provide a remedy in the event of a wrong or erroneous refund sanctioned when Section 18 cannot be treated as an http://www.judis.nic.in W.P.Nos.13954 to 13956 of 2012 independent provision but subject to restrictions and conditions under Section 19 of the VAT Act.”
4. In the light of the aforesaid decision, which squarely applies to the facts of the present case, these writ petitions are disposed of, with a direction to the respondent herein to pass appropriate orders, afresh, in line with the observations made in paragraph 63 (4), supra. Such an exercise shall be carried out by the respondent within a period of four weeks from the date of receipt of a copy of this order. No costs. Consequently the connected MPs are closed.
09.03.2020 srk http://www.judis.nic.in W.P.Nos.13954 to 13956 of 2012 R.MAHADEVAN, J.
srk To
1. The Commercial Tax Officer, Bazaar Circle, Tirupur W.P.Nos.13954 to 13956 of 2012 & M.P.Nos.1, 1 and 1 of 2012 09.03.2020 http://www.judis.nic.in